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Declining returns from tax saving funds

Consider exiting your fund if its rating and returns decline consistently

I invested Rs 10,500 in Sundaram Tax Saver fund in December 2010. The current value of my investment is about Rs 9,500. It would be in the lock-in period till December 2013. Should I withdraw or continue with this fund?
-Alnoor Dhodia

Sundaram Tax Saver is a two-star rated fund. Although most equity investments have been disappointing, but this fund has been more disappointing than the markets in general and other tax saving investments. The fund lost 2.4 per cent over a three-year period while the category lost 1.04 per cent during the same time.

It would be wise to redeem from the fund after your investments complete three years in the fund.

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